UK SMEs To Increase IT Investments In 2023

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New research from Sharp UK finds nearly half of UK SMEs will invest in new technology in 2023, despite concerns over rising prices

Almost half of the UK small and medium sized enterprises (SMEs) sector are to invest in technology in 2023, new research has found.

The research, from IT products and services provider Sharp UK found that 44 percent of UK SMEs plan to invest in technology in 2023, despite serious concerns over rising costs.

The findings come after analyst house Gartner in April predicted that despite the ongoing economic uncertainty, worldwide IT spending would total $4.6 trillion in 2023, an increase of 5.5 percent from 2022.

SME spending

The research from Sharp UK also found that UK SMEs will prioritise IT security, hardware upgrades and server updates, as their technology investment continues to rise.

Sharp’s research surveyed 5,770 SMEs across Europe, including 502 in the UK. Challenges flagged by the survey for these SMEs include hybrid working technology issues and business continuity.

The Sharp survey also found that over 50 percent of UK SMEs plan to invest more than £20,000 on IT this year, with 5 percent expecting to invest more than £100,000.

Businesses also shared that they intended to invest in new hardware (33 percent) and server upgrades (28 percent) over the course of 2023.

This is in addition to security and business continuity (34 percent) which were also highlighted as key areas for investment.

But the Sharp survey also made a surprising discovery after it found that cloud migration was a lower priority for UK businesses (21 percent) than SMEs in Europe, where almost a third (31 percent) of firms planned to embark on cloud migration projects as they continue to deal with the challenges of hybrid working.

However, the survey found that IT, education and awareness may be a specific challenge for UK SMEs to address, with implementing Cyber Essentials (25 percent) and improving on Business Intelligence/MI (23 percent) being amongst the top investment priorities for the next 12 months.

And it is clear that the SME sector is feeling the impact of the current economic situation, after the survey found that rising supply costs (39 percent) and the cost of living in general (41 percent) being of greatest concern in the UK, in comparison to the rest of Europe, with the lowest respectively (26 and 27 percent) for Sweden.

Strategic investments

And the ongoing battle to find needed skills remains, after the Sharp survey noted that finding and retaining talent (23 percent) and managing a diverse hybrid workforce (22 percent) were flagged as key issues, slightly lower than the rest of Europe at 27 percent for both.

“Despite understandable concerns about rising costs in the UK, businesses here are investing strategically in technology and seeing its value, even at a time of uncertainty,” said Stuart Sykes, managing director at Sharp UK.

“Organisations of all sizes are dealing with a host of issues in a hybrid working environment such as IT and security challenges, ensuring that technology is planned to support these issues now and in future,” said Sykes.

As with other SMEs in Europe, IT security is the biggest technology challenge UK businesses feel that they will face over the next 12 months, with a third (33 percent) highlighting security as their top priority.

Interestingly tech challenges varied between business sectors in the UK. Hybrid working technology issues was flagged as the most critical issue for almost two thirds of SMEs surveyed in the legal sector (63 percent) and for nearly 4 in 10 of the healthcare industry (38 percent).

Employees’ ability to use software was reported as the primary challenge for the healthcare sector (50 percent).

“The past two years have reshaped the way businesses run, how their employees work, and expanded their threat landscape,” added Colin Blumenthal, European VP, IT Services at Sharp Europe.

“The continued shift of workloads, processes and data to the cloud and on-premises infrastructures are enabling enterprises to create a value proposition that supports a new generation of workers and will be key to hiring and retaining the best talent possible,” said Blumenthal.

“It’s encouraging to see that SMEs across Europe are realising the opportunities for growth through investment in IT,” said Blumenthal. “Those priority projects that will receive funding over the coming months will deliver greater efficiencies, better management of diverse hybrid workforces, and support in delivering improved IT security.”

UK SMEs in the legal, finance and healthcare sectors intend to invest the most in IT in 2023.

When asked how their 2023 IT spend will compare to 2022, 75 percent of SMEs in the legal sector, 55 percent in the finance sector and 50 percent within healthcare planned to increase their investments.